Income Statements, Variable and Absorption Costing The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,300 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $10.00 Variable overhead $2.00 Variable selling expenses Fixed costs per year: $2.00 Fixed overhead $200,000 Fixed selling and administrative expenses $240,000 There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next Required: 1. How many units are in ending inventory? 300 units 2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income 3,000 X eBook 3a. Assume the selling price per unit is $32. Prepare an income statement using variable costing. Vladamir, Inc. Variable-Costing Income Statement For Last Year 3,232,000 Sales Less: Variable cost of goods sold 2,020,000 Variable selling expenses 202,000 1,010,000 Contribution margin Less: Fixed overhead 300,000 X Fixed selling and administrative expenses 230,000 X 480,000 X Operating income Feedback 3b. Assume the selling price per unit is $32. Prepare an income statement using absorption costing. Vladamir, Inc. Absorption-Costing Income Statement For Last Year Sales 3,232,000 Less: Cost of goods sold 2,323,000 X Gross profit 909,000 X 3b. Assume the selling price per unit is $32. Prepare an income statement usi Vladamir, Inc. Absorption-Costing Income Statement For Last Year Sales 3,232,000 Less: Cost of goods sold 2,323,000 X $ 909,000 X Gross profit Less: Selling and administrative expenses 432,000 X Operating income $ 477,000 X